Forex News | Currency News by Forexlive

With the focus clearly on USDJPY today, EURUSD has managed to hold up reasonably well considering the amount of EURJPY that has been sold. Im hearing of bids at 1.4270-80  that should hold EURUSD up in Asia at least. Some buyers EURGBP under 8780 should also lend support for now. However, I cant see it holding up in Europe in the EURJPY selling continues. Under 1.4280, Its back to 1.4200 we go.

After hitting 11 month highs earlier this morning the Nikkei has turned negative to finish the morning session down 0.4%. The Nikkei had soared ealier this morning, up over 2.2% at one stage in the wake of a historic victory by the opposition in Sunday’s national election. However, there was a dramatic sell off over the last hour, as the Chinese Composite opened down 1.5% and extended losses, down 4.5% at the moment.

Chinese stocks have been sold off heavily following Friday’s 2.9% sell off,  as investor are still worried about the drop off in Chinese bank lending in August which in turn would trim liquidity flowing into stocks.

Japanese wage earners’ total cash earnings dropped 4.8% in July from a year ago. This is slower than the record annual decline we saw in June. Overtime pay, a measure of strength in coporate activity, fell 16.5% in July from a year ago, also slightly slower than the 17.5% annual decline we saw in June.

No effect on USDJPY

Australia: Q2 Company profits of -7.8% qtr/qtr s/adj, is also worse than expected. Forecast was for a reading of -5%. Q2 company profits before income tax was up 5.4% qtr/qtr s/adj.

In other economic data, July Private sector credit was up 0.2% mth/mth s/adj. This was bang on forecast. Australia July Housing credit was up 0.6% mth/mth s/adj.

AUDUSD has been sold off a touch after these economic numbers.

The value of stocksheld by Australian private businesses in Q2 came in at -3.4% s/adj. this is worse than the expected -1%.

Stops below 93.20 and larger ones beneath 93.00 have been triggered, sending it as low as 92.60. No demand was seen at the Tokyo fix for EURJPY also, plunging with USDJPY to take out stops sub 133.00, with traders saying liqudity has been on the thin side this morning.

Technically, EURJPY has been pushed down thru the Ichimoku cloud between 132.60 – 133.10. Any rally back towards 133.00-20 will see players looking to sell in Asia today.

AUDUSD remains well bid after Friday’s strong showing against the US Dollar. The AUDUSD is underpinned by expectations of a hawkish statement bias by the RBA at their meeting tomorrow, even though its widely expected that they will keep rates on hold. However, the view in the market is that the RBA will raise rates by the end of this year.

Support on the day is at 8390 with resistance still up at 8470-80 area. A break above 85c will see some seriousmodel fund buying.

In what could be a big blow to the investment bank industry, Chinese State-Owned Enterprises are set to cancel a large number of commodities contracts according to the Caijing online.

Much ado about nothing really this morning. The Nikkei has gained in line with Wall Street and the JPY crosses have more or less returned to heir opening levels.

Japan: Manufacturing PMI figures for July show a rise to 53.6 from 50.4, a three year high. PMI output rose to 58.7 from 54.7.

In other data, Japan July Industrial Output was up 1.9% mth/mth, better than the forecast +1.4%. Industrial output grew 8.3% in Q2 after falling a record 22.1% in Q1. August manufacturers’ output was seen up 2.4%, below previous forecast of +3.3%. September Manufacturers’ output seen +3.2%.

Japan July retail sales was down 2.5% yr/yr, better than the forecast of -3.6%. Month on month, July retail sales came in at +0.4% s/adj.

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